Branson Ltd owns two delivery vehicles (each with a residual value of $6,000 and useful life of 4 years) and uses the straight-line method of depreciation. The business closes its accounting records annually on 30 June. The following events and transactions occurred during the first 3 financial years. Ignore GST.
End of Chapter Problem 14.1 Branson Ltd owns two delivery vehicles (each with a residual value of $6,000 and useful life of 4 years) and uses the straight-line method of depreciation. The business closes its accounting records annually on 30 June. The following events and transactions occurred during the first 3 financial years. Ignore GST. 2016-17 July 1 Purchased a delivery truck from Mangrove Mountain Motors for $71,000 cash plus stamp duty of $730, and registration and third-party insurance of $990. June 1 Made minor repairs to the truck for cash at a cost of $500. June 30 Recorded annual depreciation. 2017-18 July 1 Purchased a delivery van from Northern Motors for cash, $53,000. This van was a used vehicle which was expected to last 4 years from the date of purchase. Fitted four new tyres to the van at a cash cost of $1,560. June 30 Recorded depreciation on both truck and van. 2018-19 July 1 Paid $4,400 for an overhaul of the motor of the delivery truck. This expenditure is expected to extend the useful life by 1 year. The parts replaced in the truck were considered to have a carrying amount of $2,000. Installed a two-way radio in the delivery van at a cost of $2,000 to improve efficiency. This expenditure will not increase the useful life. June 30 Recorded depreciation on both truck and van. Prepare entries in general journal form) to record the transactions of Branson Ltd as they relate to both vehicles to 30 June 2019. (Enter all debit entries first, followed by all credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) Branson Ltd General journal as at 30 June 2019 Debit Credit Date Particulars 2016 July 1 (To record acquisition of delivery truck) 2017 June 1 (To record minor repair work) June 30 (To record annual depreciation expense) July 1 (To record acquisition of delivery van) (To record installation of new tyres on van) 2018 June 30 (To record total depreciation expense) July 1 (To write off accumulated depreciation on delivery truck and delivery van (due to increased efficiency of the van)) July 1 (To write off accumulated depreciation on delivery truck and delivery van (due to increased efficiency of the van)) July 1 (To record overhaul costs on delivery truck) July 1 (To record write-off of parts replaced) (To record acquisition of two-way radio for the van) 2019 June 30 (To record depreciation expense)
